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Colliers International is buying a 75% stake in Chicago-based Harrison Street Real Estate Capital, the latest merger and acquisition in a 12-month period that has seen Unibail buy Westfield, Brookfield acquire GGP, Amazon swallow Whole Foods and more on the horizon.
Colliers is paying Harrison Street $450M for the majority stake, with an additional $100M due in 2022 based on the company achieving certain performance targets. Harrison Street's senior management team will hold the balance of the company, and Christopher Merrill will remain as CEO.
Colliers expects the annual run rate of management fee revenue to be between $100M and $115M. “The recurring management fees and institutional quality reporting and governance offers Colliers another stable and recurring source of revenue and a tremendous opportunity to create value in the future,” Colliers Chief Financial Officer John Friedrichsen said in a statement.
Colliers Chairman and CEO Jay Hennick said the acquisition will allow the firm to integrate its existing European operations while opening a new growth platform. Harrison Street has been busy in Europe this year. The firm is building a $53.4M student housing facility in Birmingham, England, and formed a joint venture with ULiving to target student housing developments in top-tier U.K. markets. Harrison Street acquired a 1,000-bed German student housing portfolio from MPC Capital, and sold a $1B student housing portfolio to a joint venture of Scion Group, the Canada Pension Plan Investment Board and GIC, Singapore's sovereign wealth fund.
Merrill said the deal provides long-term stability and increased alignment among its team and limited partners. "The relationship strengthens our global capability and offers unique market knowledge and deep relationships with owners and occupiers of real estate around the world," Merrill said.
Berkshire Capital acted as financial adviser and DLA Piper acted as legal adviser to Harrison Street and the management team, while Three Ocean Partners acted as financial adviser and Winston & Strawn acted as legal adviser to Harrison Street’s shareholders. Sidley Austin was legal adviser for Colliers. Bisnow reached out to Harrison Street and Colliers for further comment, and will update this article if those requests are answered.
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